How to Write a Proof of Claim in Bankruptcy

When a customer files for bankruptcy, your invoices immediately move into legal limbo. Phone calls, reminder emails, and collection efforts all stop. The only way to protect your right to repayment is by filing a Proof of Claim.

A Proof of Claim is more than a form. It is the official statement to the bankruptcy court that says:

• You are a creditor
• You are owed money
• Here is the evidence to prove it

Without it, you risk recovering nothing, even if assets are distributed. This guide explains what a Proof of Claim is, how to write one, the common mistakes to avoid, and includes a ready-to-use template you can adapt for your business.

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What Is a Proof of Claim in Bankruptcy?

A Proof of Claim is a legal document filed by a creditor in a bankruptcy case. It establishes your right to participate in any distribution of the debtor’s estate.

The form includes:

• The creditor’s name and contact information
• The debtor’s name and case number
• The total amount of the debt owed
• The basis of the claim (goods delivered, services provided, loans, etc.)
• Whether the claim is secured, unsecured, or priority
• Supporting documentation

In U.S. cases, the official form is Form B410, issued by the federal bankruptcy courts.

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Why Filing a Proof of Claim Is Critical

• No claim, no payout. If you do not file, you are not legally recognized as a creditor.
• Missed deadlines mean zero. Courts set strict “bar dates.” Late claims are usually excluded.
• Accuracy affects recovery. Vague, inflated, or sloppy claims are often rejected.
• Priority matters. Secured creditors with liens or collateral are paid first, followed by priority claims like taxes and wages. Unsecured creditors are last in line.

Fact: In Chapter 11 reorganizations, unsecured creditors often recover less than 10 cents on the dollar. But secured creditors who properly filed liens can recover much more.

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Step-by-Step: How to Write a Proof of Claim

Here is the process every credit manager should follow:

1. Get the official form

Download Form B410 from the U.S. Courts website or use the form provided in the bankruptcy notice.

2. Identify the case

Include the debtor’s full legal name and bankruptcy case number exactly as listed in court documents.

3. Provide your creditor details

Include your business name, address, and contact information. Add your tax ID or account number if required.

4. State the amount owed

• List the principal balance
• Add interest and late fees if supported by your contract
• Use the amount as of the bankruptcy filing date

5. Describe the basis of the claim

Clearly explain why the debtor owes you money. Examples:

• Goods delivered under a contract
• Services rendered under an agreement
• Loan or line of credit extended
• Lease or rental obligations

6. Identify secured, unsecured, or priority status

• Secured claim: Backed by collateral or lien (UCC, mortgage, etc.)
• Priority claim: Certain debts like wages or taxes that get special treatment
• Unsecured claim: No collateral. Recovery depends on what is left after higher-priority creditors are paid.

7. Attach documentation

Include all supporting evidence:

• Contracts and agreements
• Invoices and purchase orders
• Delivery receipts
• Payment history

8. Sign and certify

You must sign the form, certifying under penalty of perjury that the information is accurate.

9. File before the deadline

• File electronically through the court system if available
• Or file by mail as instructed in the notice
• Always keep copies of what you submit

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Common Mistakes That Can Kill Your Claim

• Missing the deadline: The number one reason claims are disallowed.
• Incomplete forms: Leaving out required fields makes the claim invalid.
• Not attaching documents: Without proof, your claim is easy to challenge.
• Inflating the debt: Overstating what you are owed can backfire and lead to objections.
• Failing to classify properly: Marking a secured claim without actual collateral will get rejected.

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Pro Tips for Credit Managers

• File early to avoid last-minute errors
• Organize documents in advance for faster filing
• Coordinate with your legal team if the claim is large or complex
• Track all claims in a central log so you never miss deadlines
• Review your credit policies after every bankruptcy to strengthen future protection

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Prevention Is Better Than Recovery

Filing a Proof of Claim may help you recover something, but unsecured creditors often get pennies on the dollar. The smarter move is to prevent surprises.

With Credit Pulse’s fraud-resistant credit applications and AI-powered monitoring, you can:

• Detect financial stress early with real-time signals
• Monitor customers continuously for changes in payment behavior, liens, or lawsuits
• Reduce exposure by tightening terms before bankruptcy hits

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FAQ: Proof of Claim in Bankruptcy

Do I need to file a Proof of Claim in every bankruptcy?
Yes, unless the court automatically schedules your claim. Always confirm through the bankruptcy notice.

How do I know if I am secured or unsecured?
You are secured only if you have collateral or a lien properly filed before bankruptcy. Everyone else is unsecured.

What happens if I miss the deadline?
You may be excluded entirely from distributions. Courts rarely accept late filings.

Can I sell my claim after filing?
Yes. Many hedge funds and distressed debt buyers purchase bankruptcy claims for immediate cash.

Where can I get the official form?
Form B410 is available on uscourts.gov and is included in most bankruptcy notices.

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Final Thoughts

A Proof of Claim is not just a form. It is your lifeline in bankruptcy proceedings. Filing correctly, on time, and with the right documentation maximizes your chance of recovery.

Bottom line: File smart, protect your rights, and build a credit strategy that prevents surprises.